Oil Taxation Act 1975 section 7

Relief for allowable losses

Section 7 explains how a participator in an oil field can obtain relief for allowable losses against assessable profits from the same field.

• Allowable losses from an oil field are automatically carried forward and set against the participator's assessable profits from the same field in succeeding chargeable periods.
• A participator may make a claim to carry back an allowable loss and set it against assessable profits from the same field in preceding chargeable periods.
• Where a loss is carried back, the relief is applied to the latest preceding period first, working backwards through earlier periods.
• If oil production from the field has permanently ceased and losses remain unrelieved, any remaining losses can be set against assessable profits from the field in any chargeable period, working backwards from the latest period.